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2025 Supreme(Kar) 1030
IN THE HIGH COURT OF KARNATAKA AT DHARWAD BENCH
C.M. POONACHA, J.
Murali Honnappa Nayak S/o Honnappa Naik - Appellant
Versus
The Divisional Controller, Sirsi - Respondent
Writ Petition Nos. 65056, 65057, 65058 of 2012
Decided On : 19-09-2025
For the Appellant : Dinesh M. Kulkarni
For the Respondents: N.S. Kini, Jairam Siddi
In calculating gratuity, dearness allowance should be included when specified by regulations; no errors were found in the authorities' calculations, leading to the dismissal of the petitions.
Headnote:(A) Payment of Gratuity Act, 1972 - Sections 2, 4(2), and 4(5) - Calculation of gratuity - Gratuity calculated without adding dearness allowance was affirmed - No material presented by petitioners to indicate that the calculation was erroneous - Court upheld the original and appellate authority's calculation. (Paras 2-7)
(B) Employment Benefits - The definition of wages includes all emoluments earned by the employee but excludes certain allowances - Gratuity under Section 4(5) may exceed that under the Act if provided by an award or agreement. (Paras 2, 4)
Facts of the case:
The writ petitions were filed by employees questioning the calculation of gratuity made by the Assistant Labour Commissioner, which was affirmed by the Appellate Authority. The key discrepancy was the inclusion of dearness allowance in calculating gratuity under the regulations.
Findings of Court:
The calculations made by both authorities were found to be correct, and the petitioners failed to demonstrate any error in their determinations.
Issues: The main issue was whether the dearness allowance should be included in calculating gratuity under the Corporation's regulations, per Section 4(5) of the Act.
Ratio Decidendi: The court concluded that petitioners did not provide material evidence to suggest the authorities' calculations were incorrect and maintained the original authority's decision as upheld by the appellate authority.
Result: Writ petitions dismissed.
ORDER :
1. The present writ petitions are filed by the workman calling in question the calculation of gratuity made by the Assistant Labour Commissioner [Hereinafter for short ‘Original Authority’] which has been affirmed by the Appellate Authority/Deputy Labour Commissioner. The details of the period of service, and the calculation of the gratuity made in the case of the petitioners is as under:
S. No. | WP No. & Name | No. of years service | Calculation of gratuity under Section 4(2) of the payment of Gratuity Act (Rs.) | Calculation of gratuity under Section 4(5) of the payment of Gratuity Act (Rs.) |
| 1 | WP No. 65056/12 (Murali) | 25 years 3 months | 1,56,447/- | 1,83,820/- |
| 2 | WP No. 65057/2012 (Maruthi) | 28 years 7 months | 1,83,570/- | 1,94,795/- |
| 3 | WP No. 65058/2012 (Ganapati) | 27 years 7 months | 1,58,695/- | 1,58,466/- |
2. It is pertinent to note here that the explanation to Section 4 (2) of the Payment of Gratuity Act, 1972 [Hereinafter for short ‘the Act’] indicates the manner of computation of gratuity. Section 2 of the Act defines wages, which includes all emoluments earned by the employee, including the dearness allowance, but excludes any bonus, commission, house rent allowance, overtime wages and any other allowance. Section 4 (5) of the Act stipulates that “nothing mentioned in Section 4 shall affect the right of an employee to receive better gratuity under any award or agreement or contract with the employer.”
3. The original authority while assessing the gratuity payable under Section 4 (2) has included the monthly wages along with dearness allowance. While considering the gratuity payable under the regulations of the respondent-Corporation for the purpose of ascertaining as to whether the petitioners would be entitled to a higher amount having regard to Section 4 (5) of the Act, the authority has reckoned the monthly wages without adding the dearness allowance.
4. It is the primary contention put forth by the petitioners in the above writ petitions that while calculating the amounts under the regulations of the Corporation, for the purpose of ascertaining whether the same would tantamount to a higher amount, to enable payment of the same having regard to Section 4 (5) of the Act, the Authority has not added the dearness allowance to the monthly wages.
5. It is pertinent to note that in WP No.65056/2012 and WP No.65057/2012, the authority after determining the gratuity payable under Section 4 (2) of the Act and under the regulations of the Corporation has recorded a finding that the gratuity payable under the regulations of the Corporation was more and having regard to Section 4 (5) of the Act, the amount as determined under the regulations of this Corporation would be payable. Whereas, in WP No.65058/2012, the Authority has recorded a finding that the gratuity payable under Section 4 (2) of the Act is more. The finding recorded by the original authority has been affirmed by the appellate authority.
6. Although, it is the vehement contention of the learned counsel for the petitioners that while making the calculations under the regulations of the Corporation, the dearness allowance ought to be added to the monthly wages, it is pertinent to note that no material has been placed on record to indicate that for the purpose of calculating the gratuity under the regulations of the Corporation, both the monthly wages and dearness allowance is required to be added.
7. Both the original authority and the appellate authority having calculated the amounts as noticed above and having determined the gratuity payable, in the absence of the petitioners demonstrating that the calculation so made is in any manner erroneous or contrary to any material available on record, the question of interfering with the determination made by the original authority, which is affirmed by the Appellate Authority in the present writ petitions do not arise.
8. Hence, the writ petitions are dismissed as being devoid of merit.
